APRA Capability Review puts much-needed focus on super fund performance

| July 17, 2019

The Australian Institute of Superannuation Trustees (AIST) has today welcomed key recommendations made by the APRA Capability Review panel that, importantly, recognise that the regulator’s primary focus should be on long term super fund performance.

AIST’s head of advocacy, Ailsa Goodwin, said the panel’s recommendations for the regulator to publish data on the performance of all APRA-regulated products as well as objective performance benchmarks had the potential for real and long-lasting impact on the retirement outcomes of millions of Australians.

“A lack of comparable performance data, notably for non-default ‘choice’ super products where more than $1 trillion of super savings is invested, has been the Achilles heel of our super system,” Ms Goodwin said. “For too long, members of these high fee, poorly performing funds – most of which are retail funds – have been kept in the dark.”

Ms Goodwin said it was in members’ interests for the government to prioritise the recommendations on super fund performance data.

Ms Goodwin also welcomed the panel’s acknowledgment that the conflicts of interest between directors and related parties in the broader group structures of some funds also impacted on member outcomes.

 “As the Hayne Royal Commission hearings revealed, serious governance failings by the directors of retail super funds led to some very poor member outcomes. We need a regulator that is prepared to get tough on directors who fail to understand that they have a duty to put their members’ interests first.”

Ms Goodwin welcomed the panel’s recommendation to create a separate division within APRA to focus on superannuation and for APRA to be better resourced.

Ms Goodwin said AIST would be carefully considering many of the report’s other recommendations in consultation member funds and other key stakeholders.